Macro HW3

An advantage of the establishment survey over the household survey of the labor market is that the establishment survey is based on actual payrolls, rather than on unverified answers. includes persons employed at newly opened firms. includes the number of self-employed persons. provides an estimate of the number of persons unemployed.

is based on actual payrolls, rather than on unverified answers.

A lumberjack loses his job because timber cutting restrictions were imposed by the EPA to protect the spotted owl habitat. This lumberjack would be frictionally unemployed. seasonally unemployed. structurally unemployed. cyclically unemployed.

structurally unemployed.

An example of an intermediate good would be a used car. the rims on a new car. new rims to replace old rims on a used car. a new car.

the rims on a new car

Which of the following is likely to increase measured GDP? A greater number of women decide to stay at home and provide day care for their children under age 5. Tax rates increase and more people attempt to underreport their income for tax purposes. Marijuana becomes legal to grow and sell. More people decide to do their own lawn maintenance and give up using a professional service.

Marijuana becomes legal to grow and sell

Which of the following goods is directly counted in GDP? the plastic bags that Subway purchases to wrap its sandwiches the bread that Subway purchases for its sandwiches a 12-inch Subway sandwich purchased by a student the lettuce that Subway purchases for its sandwiches

a 12-inch Subway sandwich purchased by a student

Which of the following is considered a durable good? food clothing a washing machine medical care

a washing machine

What is the largest component of spending in the United States? net investment spending government purchases investment spending consumption spending

consumption spending

In the second half of 2019, automobile sales in the United States were lower than they were in the second half of 2018. The decrease in auto sales impacts GDP because new automobiles are counted as ________ when purchased by households and ________ when purchased by businesses. investment; consumption durable goods; nondurable goods nondurable goods; durable goods consumption; investment

consumption; investment

Most of the unemployment that occurred during the Great Depression was frictional unemployment. cyclical unemployment. core unemployment. structural unemployment.

cyclical unemployment.

In the circular flow model, the value of total income for an economy ________ the value of total production. is greater than equals is less than may be greater than or less than

equals

Efficiency wages cause unemployment because firms pay wages that are below the market wage, causing the quantity of labor demanded to be greater than the quantity of labor supplied. firms pay wages that are above the market wage, causing the quantity of labor demanded to be greater than the quantity of labor supplied. firms pay wages that are above the market wage, causing the quantity of labor demanded to be less than the quantity of labor supplied. firms pay wages that are below the market wage, causing the quantity of labor demanded to be less than the quantity of labor supplied.

firms pay wages that are above the market wage, causing the quantity of labor demanded to be less than the quantity of labor supplied.

Jack just told his boss that he thinks his boss is an idiot. It is likely that Jack will be experiencing ________ unemployment in the near future. cyclical permanent frictional structural

frictional

The advice to "keep searching, there are plenty of jobs around here for which you are qualified," would be most appropriate for which of the following types of unemployment? cyclical unemployment frictional unemployment seasonal unemployment structural unemployment

frictional unemployment

Which of the following is not an example of a transfer payment? social security payments to disabled persons unemployment insurance payments health insurance payments to an army private social security payments to retirees

health insurance payments to an army private

Gross domestic product understates the total production of final goods and services because of the omission of inflation. intermediate goods. household production. exports.

household production

Nominal GDP will increase only if the quantity of final goods and services produced rises. only if the price level rises. only if the price level falls. if either the price level or the quantity of goods and services produced rises.

if either the price level or the quantity of goods and services produced rises.

A sharp increase in the number of medical errors increases the number of lawyers hired to determine medical malpractice settlements. This will decrease GDP and increase well-being in the economy. increase GDP and decrease well-being in the economy. increase GDP and increase well-being in the economy. decrease GDP and decrease well-being in the economy.

increase GDP and decrease well-being in the economy.

Suppose that homemakers are included as employed in the labor force statistics, rather than being counted as out of the labor force. This would decrease the number of persons in the labor force. increase the measured unemployment rate. increase the measured labor force participation rate. decrease the number of persons in the working-age population.

increase the measured labor force participation rate.

An increase in unemployment insurance payments would, in effect, ________ the amount of time spent searching for a job, which would increase ________ unemployment. increase; frictional decrease; cyclical decrease; frictional increase; cyclical

increase; frictional

The size of the underground economy would tend to increase if the government of a country decreased government regulations on businesses. increased income tax rates. legalized marijuana. legalized prostitution.

increased income tax rates

The purchase of a new house is included in government purchases. consumption expenditures. investment expenditures. net exports.

investment expenditures

Consider the following data for Tyrovia, a country that produces only two products: guns and butter. Refer to Table 8-11. Nominal GDP for Tyrovia in 2020 equals $1,140. $880. $690. $560.

$1,140.

Refer to Table 8-4. Consider the data above (in billions of dollars) for an economy: Gross domestic product (in billions of dollars) for this economy equals $2,200. $2,100. $1,600. $1,400.

$1,600.

Consider the following data for Tyrovia, a country that produces only two products: guns and butter. Refer to Table 8-11. Real GDP for Tyrovia for 2020 using 2013 as the base year equals $1,140 $880 $690 $560

$690

Refer to Table 8-1. Suppose that a simple economy produces only four goods and services: sweatshirts, dental examinations, coffee drinks, and coffee beans. Assume all of the coffee beans are used in the production of the coffee drinks. Using the information in the above table, nominal GDP for this simple economy equals 3,090 units. $7,250. $8,750. $9,750.

$8,750.

Consider the data above for a simple economy. Refer to Table 9-1. The unemployment rate for this simple economy equals (100/1,000) × 100. (100/20,000) × 100. (100/15,000) × 100. (100/1,100) × 100.

(100/1,100) × 100.

Refer to Table 8-14. Consider the following data on nominal GDP and real GDP (values are in billions of dollars): The GDP deflator for 2020 equals 92.2. 102.6. 108.5. 109.1.

108.5.

Investment, as defined by economists, would include the purchase of a government bond. share of stock in ExxonMobil. computer by an accounting firm. corporate bond.

Computer by an accounting firm

Which of the following explains why many European countries have unemployment rates that are higher than in the United States? Firms in European countries offer employees higher wages and higher benefits than do firms in the United States. The minimum wage in Europe is lower than it is in the United States. European countries offer higher unemployment benefits than the United States. Technological change occurs at a faster rate in Europe, so structural unemployment is higher in Europe.

European countries offer higher unemployment benefits than the United States.

GDP is not a perfect measure of well-being because GDP is adjusted for increases in drug addiction. the value of leisure is included in GDP. GDP is adjusted for changes in crime rates. GDP is not adjusted for pollution.

GDP is not adjusted for pollution

The purchase by a household in China of an automobile produced in the United States is included in U.S. investment expenditures. net exports. consumption expenditures. government purchases.

net exports

Consumption expenditures do not include household purchases of durable goods. education. new houses. medical care.

new houses

Discouraged workers are classified by the BLS as employed. unemployed. part-time employees. not in the labor force.

not in the labor force.

The Bureau of Labor Statistics would categorize a retiree who is not working as a discouraged worker. employed. unemployed. out of the labor force.

out of the labor force

The GDP deflator is the ratio of nominal GDP to real GDP multiplied by 100. ratio of real GDP to nominal GDP multiplied by 100. difference between nominal GDP and real GDP divided by 100. difference between real GDP and nominal GDP multiplied by 100.

ratio of nominal GDP to real GDP multiplied by 100.

To examine how the total production of an economy has changed over time, it would be better to examine real GDP. nominal GDP. the GDP deflator. GDP at current prices.

real GDP.

Suppose the labor force stays constant, and the working-age population stays constant, but a greater number of persons who were unemployed become employed. The labor force participation rate will increase. decrease. remain constant. not change in a way that can be predicted.

remain constant.

By offering training to workers whose firms laid them off because of competition from foreign firms, the federal government is attempting to reduce seasonal unemployment. frictional unemployment. cyclical unemployment. structural unemployment.

structural unemployment.

The unemployment rate is an important economic statistic that can tell us about the health of the economy. If the unemployment rate turns out to be high or higher than anticipated, we would expect it is more likely that an incumbent president will be re-elected. that stock prices are more likely to fall. that investors will be more optimistic about the economy. that jobs are less difficult to find.

that stock prices are more likely to fall.

Since the end of World War II, each president running for reelection when the economy was growing has won, and each president running for reelection when the economy was contracting has lost. These presidents were experiencing the political effects of inflation. depreciation. the business cycle. the underground economy.

the business cycle

According to the text, economists consider full employment to occur when the unemployment rate consists of only frictional and structural unemployment. the sum of frictional unemployment and structural unemployment equals zero. everyone who wants a job has a job. frictional unemployment equals zero.

the unemployment rate consists of only frictional and structural unemployment.

Suppose in 2020, you purchase a house built in 2014. Which of the following would be included in the gross domestic product for 2020? the value of the house in 2020 minus depreciation the value of the house in 2014 the value of the house in 2020 the value of the services of the real estate agent

the value of the services of the real estate agent

Which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to overstate the true extent of joblessness? inflation discouraged workers unemployed persons falsely report themselves to be actively looking for a job counting people as employed who are working part time, although they would prefer to be working full time

unemployed persons falsely report themselves to be actively looking for a job

If the minimum wage is set above the market wage unemployment will rise. highly-skilled workers will have a harder time finding jobs. the quantity of labor supplied will be below the quantity of labor demanded. All of the above are correct.

unemployment will rise

In calculating gross domestic product, the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced. This means that the BEA simply counts the total number of goods and services produced in the marketplace and then adds them up. values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up. simply counts the total number of goods produced in the market place and then adds them up. values goods at their market prices, multiplies them by the quantity produced, and then adds them up.

values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up